Technology patent trolls snubbed in Congress

Technology companies and legislators are doubling down on the fight against patent trolls.

Microsoft, the Consumer Electronics Association, and the Software Alliance are backing proposed legislation in the U.S. House of Representatives that would do away with anonymous patents, a shell game played by patent trolls to try to hide their identity.

Patent trolls are entities that patent a product with no plans to produce it, but instead sue when someone else infringes on the patent. Such entities are causing nearly $30 billion worth of damage to the U.S. economy every year, Google wrote in a blog post.

Stronger disclosures sought

Rep. Ted Deutch, a Florida Democrat, is sponsoring the End Anonymous Patents Act, which would require any sales or transfers of patents to be disclosed. The purchasing entity also would have to file a notice of the real party in interest that holds the patent.

Under the bill, the same disclosure requirements would apply to new patents at the time they are awarded, and for currently held patents at the time of the next scheduled maintenance fee payment, according to Deutch’s Web site.

The congressman says the legislation is intended to promote transparency. It also would help potential licensees uncover the actual owners of patents and agree on terms.

“Recording ownership in the U.S. Patent and Trademark Office’s assignment database is at present voluntary, with the result that records of patent ownership are often inaccurate and incomplete. Some patent owners take advantage of this obscurity to try to hide what they own for tactical advantage in licensing negotiations or to avoid complying with patent licensing commitments,” Microsoft wrote in a blog post.

Congress has been addressing the issue of patent trolls in other ways, as well.

On May 1, Sen. Charles Schumer, a New York Democrat, introduced legislation allowing the U.S. Patent and Trademark Office to review and invalidate controversial patents challenged by technology start-ups in an effort to discourage patent trolls.

That bill would extend a patent-challenging provision in the 2011 patent reform bill the America Invents Act. The patent bill included a temporary program that allowed companies in the financial products industry to challenge business-method patents at the USPTO, and the new bill would expand the provision to include business-method patents challenged by technology start-up companies and would remove the provision’s temporary status.

Troll protection

In addition, a San Francisco company called Unified Patents recently surfaced to pool large and small companies so as to make it more difficult and expensive for patent trolls to target start-ups.

“It'll do that, in some cases, by encouraging its larger member companies to acquire the small patents that patent trolls might be trying to add to their portfolios,” reports CNET. “The organization will also ask the U.S. Patent and Trademark Office on a frequent basis to question whether the patents a patent troll brings up in lawsuits are valid.”

Unified Patents, which is backed by Google, was formed by Kevin Jakel, who was formerly head of IP litigation at Intuit.

In April, Google, BlackBerry, EarthLink, and Red Hat complained to the Federal Trade Commission and the Justice Department about the increasing harm patent trolls are causing.

Want more on this subject? Check out this interesting TED Talk on how one entrepreneur beat a patent troll.

Christina DesMarais

Christina is a contributor to media outlets such as Forbes.com, Inc.com, PCWorld.com, Auto Trader and The Minneapolis Star Tribune. She writes about a myriad of topics including technology, the automotive industry and health and fitness. Her talents outside of writing include photography, getting people to talk (although that certainly helps with writing) and gardening.More by Christina DesMarais